Afternoon wheat: Chicago and Mpls wheat slip into new contract lows
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><p id=\"isPasted\" style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Futures:</span></u></em></strong></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The recent strength in the US Dollar, although slightly lower throughout much of today’s session, looked to have been a leading influence amongst all grain commodities on Friday as most grain markets suffered heavy losses. We mentioned yesterday that we thought the rally in the Dollar (move above 109 and into new contract highs) at some point was going to create additional headwinds in wheat and start to stir the pot a bit in other markets such as beans and corn and it looked like we saw that today, especially following a disappointing week of export sales, no morning sales announcements again, and the prospect of another poor export sales report next week. A strong US Dollar makes US commodities look less attractive Globally, with some markets such as wheat more influenced than others. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Chicago March wheat saw limited trade early in the night, but in the final few hours leading up to the morning pause, the market weakened to five cents lower. Price action at the start of the day was even more defensive, with futures quickly falling to fifteen cents lower, and ultimately 18 cents lower before the break stabilized and trade levelled out the rest of the day. Friday’s weakness was enough to drive futures into new contract lows and settle into new contract lows. Next week should be important as on the weekly chart the market posted an outside week lower move after an inside week. This is typically a negative indicator, and if trade were unable to bounce out of its move into new contract lows and settle below weekly support next week at $5.26 ½, the next stop should be $5.00. On a reversal back higher, initial support moves down to $5.50</span><span style=\'font-family:\"Arial\",sans-serif;\'>.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>March KC wheat also saw limited trade early in the night, only to weaken in the final few hours leading up to the morning pause and finish four lower. And, here too, once the day session started the slippage was much more intense, with futures quickly falling to thirteen cents lower before the break stabilized and trade levelled out the rest of the day. The difference in KC was that Friday’s weakness was not enough to drive the market into new lows. That would come on a move below $5.35, which for now, remains support. But, like Chicago, next week should be an important week as the 20-cent break over the past two days has resulted in an outside week lower move, with trade taking out the lows of the past two weeks. If trade were to break down into new lows, the next stops would be $5.20 and then $5.12. On a bounce, resistance starts near $5.60</span><span style=\'font-family:\"Arial\",sans-serif;\'>.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The CFTC report, usually released on Friday afternoons, will be delayed one day this week and be released on Monday afternoon because of the New Year’s Holiday.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Headline news:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Wheat sales came in at 140,600 mt (5.166 mil bu), which is a marketing year low. The breakdown included HRW sales of 48,000 mt, SRW sales of a net NEG 19,800 mt, HRS sales of 55,400 mt, White sales of 37,200 mt and Durum sales of 20,000 mt (Unknown). </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The BAGE said the Argentine wheat harvest is 95% complete, with estimated production remaining at 18.6 MMT.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>UN's food agency world food price index for December fell to 127.0 from November's revised 127.6 figures. Most of the decline was attributed to falling sugar prices worldwide. The index in 2024 rose 6.7% but was still 20% lower than the all-time high level reached in March 2022.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Export business around this week:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>** Bangladesh is in for milling wheat. They have several tenders still open. No purchase has been finalized and may take considerable time before purchases can be confirmed.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>** Jan 7 Jordan is back in for 120 TMT of milling wheat. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>** Jan 9 Taiwan flour millers are seeking 114,650 mt of US milling wheat. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p></div>